Online Marketing Still A Faith Based Initiative. Why? What's The Fix?

The world of the intertubes should be a lot more data driven and awe-sexy than it really is.

Yet for all our collective efforts at writing and tweeting and kvetching online marketing is still based mostly on faith. Not data.

Surprising at so many levels right?

Last week I had the privilege of being invited to deliver the keynote at the annual CMA President's Dinner. John Gustavson, President & CEO of the Canadian Marketing Association, invites a hand selected audience consisting of the crème de la crème of Canadian executives from a vast array of industries. This year they were joined by senior Canadian government officials.

It is difficult to choose something for an address to such a diverse, accomplished and senior audience. My choice was the above thought, faith & data.

There were no slides, no notes, just me up on the stage talking. Ok there were around 10 or so bullet items, the talking points. On the flight to Toronto in order to prepare I also wrote down the speech (though I don't read my speeches, so it stayed on the computer).

I wanted to share the speech with you in the hope that it helps you accept the challenging reality we face. I hope it also provides you with a practical set of recommendations to kick your work up a notch or two so we can all win at this web thing.

TV. Internet Marketing. Faith. Data. Problems. Solutions. . . .

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CMA President's Dinner Keynote.

Good evening.

It is a pleasure to be here tonight and address such a beautiful audience. I want to thank John for inviting me.

My plan tonight is to present some thoughts on how to transform people and companies in the age of the Web, for about 15 minutes, and then address your questions. You are welcome to ask me questions about my talk or anything else connected to the web, companies – marketing – opportunities.

I must admit up front that I am as hard core as any evangelical born again Christian in my passion when it comes to the web. The raw innovation and empowerment that a connected digital world has unleashed is the reason I lovingly refer to it as "God's gift to humanity".

To truly appreciate some of this let us consider the world where marketing is done on faith. Television. Or for that matter magazines or newspapers or radio. All wonderful channels, that are needed and will be around for a long time! But when it comes to measuring success of our marketing efforts all of these channels are largely faith based initiatives.

Consider how we measure success of our TV campaigns.

At a time when there is massive fragmentation of channels and content consumption, where the head is becoming ever smaller with each passing day and the tail becoming really really loooooong, it is amazing that we rely on a measurement system of sampling a handful of viewers who help determine success of tens of millions of dollars of content and millions of dollars of advertising spend. It is outright mind blowing that we use a system whose own legal disclaimers essentially boils down to: "Our data is massively suspect".

Now think of how thin the ice is when it comes to measuring the impact of our precious marketing dollars in magazines and newspapers and other offline channels.

Yet we accept it.

We continue to use faith rather than data to make decisions on $120 Billion (!!) of advertising spend because we don't have much of a choice. We chalk it up to: "It is just the way things have always been." Or: "TV is really hard to measure, those boxes just don't connect or share." [It is rare that we blame the fact that we have not carried out our duty to demand more from both the channel and offline measurement systems.]

All that should explain why I have minor mental orgasms when I think of the online marketing channels and measuring actual business value delivered by our ever more precious marketing dollars.

Just thinking of all the data you can get is enough to put give you a temporary high. With 90+% accuracy you can measure the number of impressions of your ads. You can measure interactions with the ads. You can measure how many people end up on your websites. You can understand how many of them puke and leave! You can measure every facet of success (micro and macro conversions!!). You can measure revenue and economic value! For every dollar you spend! Oh my!!

Oh, oh, and you can run experiments! You can fail faster! You can involve your customer in helping you choose the look and feel of your site or the prices you should charge for maximizing profit. You can run controlled experiments to measure incremental online/offline impact and balance the portfolio of media channels you are exposed to, rather than getting distracted by sideshows like "attribution analysis".

So much promise. So exciting. And these are all things you can do today. Don't get me started on the future and what lays ahead, the excitement of it all might cause me to faint.

Yet.

Yet if you look around you on the web you'll see that we swim in a sea of mediocrity. We still see irrelevant blinking banner ads. You'll see astonishingly sucky websites, belonging to come of the best companies in the world. You'll bump into advertising that is remarkable in how irrelevant it is to customer intent. You'll see horrid landing pages. You'll experience missing calls to action, rambling text, and waterboarding through Adobe Flash.

All of it largely driven by faith.

It breaks my heart.

If for no other reason than because your employees are frustrated (they want to be, and can be, so much better) and your customers are being tortured each and every day.

So in a channel that is so full of promise, so full of data, so empowering when it comes to relevance and creativity… why is it that we suck so much?

Based on my humble experience I have boiled it down to three important things:

1. The web has been around forever and yet it is not in the blood of the executives who staff the top echelons of companies.

Make no mistake, they are smart, they are successful and they want to do better. But the web is such a paradigm shift that if it is not in your blood it is very difficult to imagine its power and how to use it for good.

How do you demand innovation & creativity & radical rethink if you can't imagine it?

2. We still believe in and live in the world of "shout marketing", the thing we have practiced on tv and radio and magazines all our lives.

It is not that we don't mean well. But our mental models are jaded.

We still believe in getting lots of impressions. We want to interrupt. We don't despise irrelevance enough. We care about "eyeballs". Because that is all we know. Unfortunately the web (/interactive /digital /social) mandates new mental models, and we are the old dog that won't learn new tricks.

3. Our lousy standards for accountability.

Pause and think of how we measure success today. We measure "reach", we measure "exposure" and other such lame metrics. Partly because that is all we have been trained to expect.

We never say: "Here is a 100,000 for my search campaigns, please come back and report on task completion rates across the top three primary purposes and the economic value added." We never say: "Don't try to fool me with page views generated, did we impact page depth on our content site?" We rarely push hard by saying: "I don't care how frequently our content was updated, what was the impact on visitor loyalty." Or say: "Fine we improved online conversion rate by two percent, but what was the impact on the sales in our retail stores?".

Our bar for accountability is less than low. It is almost non existent.

So…. It turns out the problem is not the web, the problem is not the opportunity, the problem is not measurement.

The problem is you.

The problem is every person in this room.

Our raw understanding, mental models and expectations.

I am sorry. It is kind of a bummer to hear that.

But if you are the problem then the nice thing is that you hold in your hands the power to change your companies and bring about the promised revolution of data driven customer centric online marketing.

Problem identified, how do we fix it?

At the risk of being booed out of this impressive ballroom let me say that the solution is to Embarrass Management!

People who report to you and ask people who report to you to embarrass you.

Why is it awesome?

Turns out no one likes to have their egos bruised. Leverage this powerful force to start to address the three problems I had just outlined.

There are two specific strategies I recommend.

1. Leverage Your Customers.

They want to help. You just have to politely ask.

Not being polite is popping up a 35 question survey on your site. Being polite is inviting them to answer just a couple of questions about their experience when they leave the site. Being polite is uploading your latest "oh my god they are so going to love this (!)" design into fivesecondtest or usertesting and letting your customers share feedback at the cost of a few Tim Hortons coffees. Being polite is running a/b tests on your site so your customers tell you which call to action, piece of content, navigation structure or even product price will yield highest customer satisfaction AND revenue!

Leveraging customers means that when the HiPPO / Boss (perhaps you) opens her mouth to say: "I don't think that will work" or "I like that other way better" or "No one will buy a toothbrush priced $299" or "Twitter is dumb"…. you can say: "Why don't we mock up a quick experiment / online survey / media mix model to validate your hypothesis?"

Allow your customers to help you evolve your mental model. Allow you customers to teach you new and effective marketing strategies. Allow your customers to complement your existing intelligence and savvy.

And if it is hard to get to the above point…. leverage embarrassment!

I recently spoke at a major conference about how one of the top camera companies was disappointing its customers by stinking at the long tail of search. I searched for a digital camera, wireless printer and digital camcorder as a normal undecided customer would. None of my 18 or so searches threw up a single link for this company (not organic, not paid). And yet I was ready to spend $500.

Then I copied exact text from their website for multiple products and searched for them another 20 times. Result? They still would not show up.

Trust me nothing hurts like that raw view of massive failure of your online marketing on the single best acquisition channel on the web today.

Caused embarrassment. Forced a rethink at what is a glaring football field size hole in their marketing strategy.

Who wins? Customers. And the company, they will reduce acquisition cost and make more money.

When there was an argument at a top financial services company about what the home page, the holiest of holy properties per this company, should look like what do you think the company was going to do? Go with the version the President & CEO of the company liked. One smart person interjected to say: "Why don't we take your instinct and convert it into a HiPPOthesis?".

The CEO smiled. They tried three versions. The CEO's performed worst, on goals he had chosen. He still smiled after the test because 1. They made more money. 2. Avoided a big mistake. 3. Created happy customers. 4. He learned something new.

By involving customers companies have figured out that garish zebra print bed sheets are a perfect fit for being sold in their offline stores, identified the perfect song for their tv commercial, designed the best selling dvd covers, discovered pricing / discounts / product bundles that they would never have thought would have worked.

All faster and at a lower cost, with a higher impact on the business. Mental models evolved. Accountability increased.

2. Leverage Competitors.

I have rarely found a strategy that works better at elevating the game of any company than contrasting their efforts with those of their competitors.

It is astonishing that in a medium where your competitor is just a click away, the experience is absolutely frictionless, that we still live as if the burden and hurdles of the offline world exist online.

It is in comparing to competitors, known and unknown, that you can truly get the management to pay attention. Something about the size of the hit to the ego.

Here's an example.

Recently I visited the Sr. Executives of premier technology company and showed two sets of numbers. The ACSI has been measuring customer satisfaction for more than a decade. During that decade Apple's customer satisfaction went from 77 to 84. During that exact time period this tech company's numbers went from 78 (one point higher than Apple!) to 74.

Ouch. That hurts. Especially because they have poured many millions into "improving" the site (and a few million on analytics!).

Sure they don't have the "fanboyism" of Apple, yet Apple had that 10 years ago too. It is painful to realize that Apple started behind them and moved so far ahead, during a time where they not only did not defend their lead…. they actually regressed.

What do you think the management is doing now? Yep, questioning key things like who makes decisions, what the org structure looks like, how can they replace current hyper matrixed accountable structure with something that forces the right behavior at all levels.

Here's another example.

Rather than showing a CPG company how one of their sites was doing I took the liberty of comparing their tea website with their detergent website with their shampoo (personal grooming) website. It was astonishing how each was doing. For example the much smaller tea business was doing better than their key personal grooming business.

But I did not stop there. I compared them to an external benchmark.

What do you think I used? Their direct competition? No. I compared them to my blog's traffic.

It turns out I get two times the traffic when compared to all three of them combined!

Now my blog has nothing to do with a large multichannel CPG company. Yet I write a blog on an esoteric topic (I know that no one really cares about web analytics) and I write twice a month.

Yet I can get more traffic! Part time. With no marketing.

And they spent a couple of million dollars building their websites. To deliver what outcome?

Can you guess the result of this effort?

If you guessed a massive evaluation of their online strategy, ordered from the very top, then you would have guessed right.

Competitors provide a great contrast to your lameness or awesomeness. Be it leveraging the full power of online marketing channels. Be it creating optimal customer experiences. Be it bringing a new layer of imagination and accountability to your existence.

Embarrassment works.

Of course you have to do it right and be absolutely transparent that comes from a place of deep love and from a desire to to be better.

Because you see the goal is not to embarrass. The goal is not to be rude.

The goal is simply to provide context, fast. The goal is to get you, and your companies, to move beyond faith. The goal is to see the obvious potential in front of us. The goal is to throw away the shackles that have for far too long weighed us down.

That is what I mean by, now in quotes, "embarrass".

I hope you take away the passion I feel for making sure that advertising on the internet has to be magnificent and accountable. I hope you'll go empower your organization to "embarrass" you and that you'll do the same to them. I hope tomorrow will be the first day of a revolutionary transformation for your business.

Good luck!

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The speech was received better then I expected (never easy to tell your audience they are the problem, or lay out tough to swallow solutions). I was profoundly grateful for that. The Q&A session following the speech was a of fun as well (always nice to get a chance to give my "It's not a OR world we live in, that's for super lame folks, it's a AND world!" mini sermon).

It's your turn now.

I would love to get feedback. What are your thoughts on the promise, the three problems and the two possible solutions to jump start a magical revolution?

Comments

Avinash, Thank you for the most relevant post of all times.I have been a direct marketer all my life.Direct marketing industry is taking the web by storm just like retailers and the shift in strategy & dollar allocation is equally impressive. But TV & Print still prevails strongly in the mindset of the industry.I must sheepishly admit that sometimes it's not without reason.A significant section of the direct market demography responds well to real time catalogs. The actual conversion attribution( or what is more popularly known as match backs) still strongly favors keeping the catalogs & the tv ads going. Now the fact that ROIs are significantly lower than the web is a different story.Being a web marketer myself, all I am saying is it'll take a lot more than just merely riding the crest of web craziness to actually have industries and brands make the shift from what you aptly described as "shout marketing".

Thanks for this very relevant post. I enjoy reading about HiPPOs. But sometimes the problem is not always a HiPPO, sometimes the problem is in the lower layers of the company.

Sometimes the lower layers are missing the data orientated culture or have limited understanding of how web oriented initiatives can change their day-to-day life. I believe the lack of data oriented culture and understanding of web analytics, shift the priorities towards other projects.

My question is how to develop the culture of Web Analytics / Data Orientation in lower layers of the company rather than at HiPPO level? Any suggestions?

Great post Avinash. As digital marketers we flounder with basics of email marketing but rush in to embrace social media while our CRM still struggles to integrate with CMS/Analytics. It's true the sooner we start demanding more from ourselves the faster the money and hence the improvement will come to digital media.

That I have faced a similar situation for almost companies I have worked in. The fact that I have shown companies data driven presentation(s) to display the FACT that their sites are performing horrendously, and that they simply shrugged and moved on.

That Online/Digital marketing is a Paradigm Shift, and it does need Top Management to understand, and make way for people who know to take over their website. I can go on with my rants but I'm sure the point is absorbed.

This is a great post / speech. As an agency we run into it all the time that, in effect, a lot of top line executives / directors / partners are all what you could describe as 'old guard' and need a fair amount of convincing that there is another, more measurable way.

It's the issue of a testing culture. The shift needs to be to testing rather than HiPPO based thought processes. Once that shifts, it will become very interesting. It is shifting though, and it's snowballing quite rapidly with some excellent example cultures (Zappos, Amazon, Google to name a few) that really get non shout / data driven marketing.

This is a fresh and interesting approach you have taken to make a point with senior executives. I sure hope it made a big difference in their approach and thinking.

It comes down to the key metrics on a CMO's scorecard. Except for online only companies, online is still a smaller portion of most companies' total marketing spend, expecially for CPG marketers. If a CMO cares only about a couple of online KPIs, it makes a big difference on how thier online marketing teams executes. The entire effort may focus on optimizing for those KPIs, which may not necessarily provide the best customer experience. In that case, do we have the right KPIs on CMO dashboard? Rather than treating online channel as another channel, do we use it for customer insights that can drive the entire marketing strategy? As much as CMO should continue to push for more data centric approach, it is also in the hands of online marketers to push the value of online channel and lead the organization in data based insights. Nice post!

Great speech. It's not often you can attack an audience and have them applaud you for it.

Have you gone into detail about "sideshows like 'attribution analysis'"? I know that it can be more political in an organization than not, but I'm a bit in the dark about alternatives. What's a better way to balance a portfolio of media channels? [blog entry hint if it's not already done-I did search for it]

Thank you Avinash! I wish you would be invited to many, many more of such meetings ;-)

I recently got a response about the possibility of tracking the impact (instead of the range) of a TV spot which refers to a website: "If I want to know the impact, I call market research. Webstatistics are only about trends anyway. I need hard facts."

That day I took a foto when cycling home. You have seen it recently when we met for a minute, but here it is for any other who likes to do better, but was not yet asked to embarrass the upper management: http://www.flickr.com/photos/8415759@N03/4660141060/
(As I am a die-hard optimist after all, I take it as a motivator – and the beautiful colors counter the somewhat desperate message anyway ;-)

Regarding your questions about the proposed solutions I generally agree. But my experience is that sometimes comparisons with competitors are questioned again and again. At the end a "business case" or hard fact numbers (money) are required. This does not really lead to a quicker failing…
I understand this as a reflex of not to admit that things are probably not perfect (and worse: admitting this has not been done well in the past). Allowing people to "embarrass management" as you say requires a strong culture of open and honest communication and also a high level of self-confidence of those who dare to ask for this. Last but not least this requires a culture of taking it positive when learning from failures. This is well known to be a good management practice, but rarely is really in place.

I agree. For the measurement of many of our campaigns, the higher ups demand results, have the necessary skepticism to ask the right questions, and are ultimately the ones who have to answer to wasted spends. Sometimes the people below them get in the way, shield our agencies, accept that there aren't any real success metrics, and the last thing they want to do is let us ask any "tough" questions (tough questions defined as ones you have to answer).

Mahalo from Hawaii. Sometimes I wonder if my confusion on these matters is a function of my geographic isolation, but I just have to read your postings to realize that even really smart people are trying to figure it out. I'm going to follow you more closely, Avinash.

I think its going to take another 5 years for this message to get out. The culture of "Smoke & Mirrors" is not going anywhere. Its a lot easier to lie as long as there is no meaningful measurement. Convincing someone that smoking is bad for you 50 years ago, is the state of affairs Analytics Marketing is at..at least they (Advertisers) acknowledge there is a problem. but can't quit.

Hi Avinash, thanks for sharing these, I absolutelly agree with you (how not), sometimes is a little depressing to fight against blind Marketing Departments. I truly believe this is not going to change easily. New talent is needed for driving this type of change.

In the kind of companies you refere to, not only HIPPOs are far away to see the opportunity, many Persons In Charge (PICs ;-)) as well. At the end these kind of companies will be more likely a farm than other thing :-)

Have you ever considered combining Seth Godin's 'Lizard Brain' persona with some of your thinking? I feel the inaction we see in so many marketing depts and the fear of the transparancy that accountability brings may marry well with Seth's enemy profile too.

Outcome #2: Missed opportunities in $(potential revenue lost) To bring forth honest,no BS to the conventional way of thinking "It is just the way things have always been." through the lost/gain in $

Outcome #3: Customer Satisfaction $
Faith based ? Or tapping into what the customers are actually thinking / talking / living with a brand. Missed customer satisfaction $ ! for the failure to act upon outcome #2

I had one comment with respect to problem #1 [The web has been around forever and yet it is not in the blood of the executives who staff the top echelons of companies] – I think more than just getting the web to be a serious part of senior management, they need to understand the changing way of business more & more & understand that the web & it's closeness with customers is real & now & not a trend..this book is a great example – The Starfish and the Spider: The Unstoppable Power of Leaderless Organizations by Ori Brafman & Rod A. Beckstrom..thanks avinash…anand

The revolution has only just begun. The web holds amazing potential and possibilities for those Digital Marketers who embrace the web and its graduated level of measurement compared to offline channels like TV and Radio.

As Web Analysts and Digital Marketing professionals we will never be able to provide perfect counts of visits and pageviews, but then why would we, these are the lazy man's metrics. Those of us seeking wealth in web analytics data, the truth seekers, know it is the dynamic metrics that reveal true customer insight and lead to real actionable data.

On the three reasons we suck:

1. You're absolutely right, the web is NOT in the blood of the executives who run these large organizations. So I think it's incumbent on us to educate and empower these C-Level, VP-Level, or whatever level executives, to understand the fantastic transparency and reach of digital marketing.

2. I agree, we still believe in "Shout Marketing". Impressions/eyeballs have always held such great sway over marketing budgets. It's time we educate our companies/industries on how this type of marketing is so old-school and shotgun-like while digital marketing is more laser-guided than anything offline.

3. We have set the accountability bar very low. Surprisingly HiPPOs are okay with this when often times they are evaluated by reaching very specific goals. This is one area I would suspect HiPPOs would be very happy to incorporate into their marketing organizations: a great level of accountability. And where can accountability be best measured? In the digital marketing world!

Finally, leveraging both your customers and your competition should be default approaches for digital marketing professionals, but again, we need to educate our executives/organizations on the wealth of information to be gleaned from these two extremely valuable resources.

Brilliant! You have clearly laid out the challenge and now it is our job to walk our customers and clients to the watering hole that has our customers engaged, interested and want to drink the same water of success but by one's own doing. We have removed dependency of others that failed to demonstrate value. In our new world if we don't demand and demonstrate value we are dead! Did I say Brilliant!?

It's hard to get this mindset approved by senior level management where I live and work (Nicaragua). My argument is always that early adopters will see the larger benefits, and getting to online marketing early in the game (though NOW is not early to us, it still feels early to them) will mean more ROI in the future.

On the other hand, Nicaraguan marketing suffers from complete ignorance when it comes to web analytics. ("Google Analytics? What's that?" That bad at even the most advanced advertising agencies in Managua. )I'm trying hard to educate those in charge of these primitive web presences, but the country as a whole is just frustratingly behind on any kind of measurable and successful online marketing efforts.

1. The web has been around forever and yet it is not in the blood of the executives who staff the top echelons of companies.

– Despite me throwing a copy of your first book on a many conference room tables and saying "We all need to read this so you can ask me the best questions", it largely remains unread by the folks I asked to. The prevailing attitude is "that's your job". Until HIPPos realize their web team can't know everything themselves, this problem will persist. Maybe we need to make them flashcards.

2. We still believe in and live in the world of "shout marketing", the thing we have practiced on tv and radio and magazines all our lives.

-We haven't really understood engagement yet, organizationally. Sales teams just want the leads, web teams want to provide them and keep their head from in front of the cannon, and CEO's just want to see the magical ROI. Those three groups need to get together and flesh out a bridge between Leads and Engagement. There's plenty of room for both.

3. Our lousy standards for accountability.

-Primarily, and especially in small to medium sized businesses, the web experts create their own accountability, and then pass it up the line. "Here. Measure me on this". The HIPPos don't have the faintest idea on what measures to use to gauge the value of their web expenditure aside from "did we sell anything". Remember? Your book is still sitting unread on the conference table.

I think as analysts, we need to do a better job selling the value of what we do to those above us. They know (well, they think) they need us, but they just can't get a handle on why so much, or for what.

We need to start talking about what the data COULD BE telling them if they listened to it. Then, and only then, can we overcome the three problems you outlined. Only then will they know what to ask us when they bump into us at the coffee machine.

It's not "How do the page views look this month". It's more like "What did we do for our customers while they were here, and show me some numbers to prove it."

By the way… I wanted to add that I don't think the problem is all with the top levels. I know you addressing a specific group in this case, but at the same time, it's far too easy for a web analyst/seo/poet/photographer to make the data sing when he's addressing top levels that don't know anything about what they are looking at.

As contractors, employees, consultants, or concerned neighbors, it's OUR job to push them into taking a vested interest in THEIR data.

So the problem isn't them, Avinash. Not always. We mail it in on occasion too…..

Although I agree and respect you for your insight and vision. Letting people know about this information is not good for guys like me trying to catch up.

I'm a young web entrepreneur who is extremely passionate for the web, connecting with people in real time, and creating new user experiences. However this is what I know, I can't have more people understanding their shortcomings.

A doctor has medicine for an illness. A Shaman comes along and gives the people a solution to their illness, the doctor starves, closes his doors.

Sharing is a major part of the future of the internet, shutting down walled gardens, creating communities – however it's bread and butter information for a lot of people; including me.

And to think that I would never have posted this speech (I only did it as my dear wife loved it!). I appreciate your feedback very much.

Bibi: "It is just the way things are done around here and have always been" is a very difficult mindset to break. Change and openness to new way of thinking, it often seems, is not something we (including me) are capable of, unless we force ourselves to. But force we must, and it is nice to know that you are out there fighting the good fight!

Rob: In many cases the "old guard" is extremely savvy and has done marvelous things to get their company to where it is now. The challenge is not the smarts or their desire. The challenge is to expose them to the new rules and possibilities so that they, with their experience and hindsight, can open their hearts and minds and revolutionize their businesses (with our help!).

Andrew: I have covered multi-touch campaign analysis in detail in Web Analytics 2.0. If you have the book jump to Page 358.

Material covered includes: What is multi-touch, how to identify if you have a problem (before you jump into solving it!), the seven different attribution models and problems with each, why attribution analysis is ultimately a waste of time, and I close with two promising alternatives.

One of these days I'll copy paste all that into a blog post (for now it would be too many pages :).

Matthias: You are absolutely right that one does need to be a bit more careful and nuanced in situations where one is trying to embarrass someone, hence my request at the end of the speech (it has to come from a place of love).

The best way to do this is to "de-personalize". In Web Analytics: An Hour A Day and in Web Analytics 2.0 I have shared tips on how to remove oneself from the analysis. Following that strategy means that when you "embarrass" it is not you doing it, it is the data, it is the customers and it is the competitors.

Josh: You'll be surprised at how long many top companies can survive by simply playing lip service to "we are a data driven online marketer", all the while putting the equivalent of dancing monkeys on their home page.

That said people (Senior Leaders) who get it, or have empowered their organizations to be liberated from traditional thinking, are already winning (and selling their companies for a billion dollars). But we need more of them.

Stan: You'll be surprised that I do agree with you in the pessimism that things will change anytime soon. See my reply to Josh.

But I am also very optimistic that they will and in the name of all that is holy I am going to do my damdest to make sure that that day will come sooner than we think. Even if it does not people won't be able to say: "He did not try hard enough to drive change."

If you know what the right path is, walk it and encourage others to walk it, even if for a while you walk alone. :)

Pere: An excellent observation. It is very hard, nearly impossible I would say, for a consultant to work on the culture problem (perhaps not impossible but very difficult to work on the behavior problem).

The consultant is being paid by the hour to, hopefully, deliver a clean outcome. No one wants to pay you (or me or anyone) to take the months required to have a much bigger impact by changing culture. In our short term focused culture that does not compute ROI.

I know consultants (you!) who bravely keep trying because of how much they love doing the right thing. But it does get tiring.

The will to change has to come from, and be championed, by someone internal. Else it is a lost cause.

Kevin: You are absolutely right that we also hold a lot of responsibility of trying, even if slowly over time, to transform the way our executives think about success.

If you read my problem #3, low bar of accountability, you'll see that I am essentially asking them, the Sr. Executives, to set tougher standards for measurements and value.

This means we will be held more accountable, but that is a good thing in the long run for everyone including us.

[…]
As I made my way through Kaushik’s speech “Online Marketing Still A Faith Based Initiative. Why? What’s The Fix?” I was highly impressed by his ‘no holds barred’ approach to getting his message across. How brave he must be to have stood in front of such an influential crowd and ‘call them on the carpet.’ But then I thought, why not? This was the perfect time, perfect place and perfect audience to hear it… and hear it they did.
[…]

Avinash- well said and nothing much to add. One just has to look around and they will find ample evidence of 'faith based initiatives'.

I like your three points on 'why we suck'. Another reason (I think) we are taking so long to "convert" is also that we are not yet at a stage where not delivering 'business value' from online channels for the marketing dollars spent is a death trap (and so one can get away with it).

I am expecting that to change in the near future and when that happens we will surely see a supernova explosion in the online space resulting in quite a few "black holes" :-)

Good post Avinash. Below are my thoughts on the reasons why the state of things won't change any time soon.

1. Pure inertia. Marketing is inherently risky. Most executives would rather be average doing what everyone else does than do something different/fail and then have their job at risk. The way out of this, is to have specific cases where their peers in the "same" industry are doing something better. Each industry has early adopters who are willing to stick their neck out for such new stuff. They have to be found, educated and assisted in utilizing the new methods. It takes a while but you can create mini-snowballs in specific industries that can grow into a bigger snowball. I have every belief this can happen in next 10 years, not next year.

2. Mental models they believe in. They grew up believing building brand equity is critical for long term growth and profits. Thus they still pour large amounts of money into that activity in contrast to direct marketing. Their strategy has always been more pull than push. Web forces them to be more push oriented, which their historical learning told them is not as effective as pull.

3. Limitations of web. As much we feel it's a wonderful medium, it does have its limitations. Consumer attention is inherently scattered by the nature of medium as opposed to undistracted viewing in TV. Consumer behavior only slowly changes. For all the people watching in TiVO, there is still a large number that does not skip commercials especially when it's a social event such as the Lost episode or the ball game in ESPN which are watched when they're broadcast.

4. Non-scalability of online marketing. In particular, search engine keyword buying or display advertising does not provide economies of scale which is the goal for most businesses. If anything, there are diseconomies of scale as your stuff gets more popular with keyword prices / CPMs going up. In contrast, the traditional media is priced based on their content, not on your popularity as a brand. This is one of the major reason (in addition to #3) for them to stick with traditional media, even if the attendant measurements are not as good compared to digital.

5. They are not as clueless as people may think. Brand advertisers, especially CPG companies, are VERY sophisticated in their measurements of offline media spend and impact. While they do not know which particular TV show worked for them, they know overall if TV worked for them or not, this quarter. Coming from the digital world, it looks disappointing to be not able to account for it to the last penny, but if they know their overall spend is working, that is good enough for most of them.

In summary, the attendant benefits are not as compelling as a digital marketer would think, for all brand spend to shift to online and become totally accountable.

With our business, Colligent, we're addressing more effective offline media selection and accountability, using online data as proxy. It's going to be an interesting experiment on whether we can overcome #1 ourselves.

Shame on me Avinash. When speaking to people in need of understanding, I refer to "puke and leave" ever since you presented it. Shame on me for not letting every person know each and every time of its origination. They miss out on the opportunity to connect with other words of wisdom you share. You made me SMink = Smile and Think at the same time. :) Thanks. Mike

Avinash – I've been a long-time reader/follower of yours and you always have great things to say… But this keynote was amazing!

Maybe it hit me harder since I'm in the exact situation you outlined in your presentation: CPG company – doesn't fully understand internet marketing or web analytics – would rather spend millions to pay for visitors to download a coupon than spend nothing to develop great content and engage with visitors. I've been fighting this mentality for a long time and this post gives me a new line of thinking here. I'm excited to utilize my new found understanding of WHY they think that way!

Thanks for posting!

Also – I liked this post so much I posted a link to it on my blog over at CorporateRadical.com. I hope my readers follow the link and really study your keynote.

I have always been fascinated by the the raw potential of the web. I have tried to get myself into a position where i can work with an online marketing firm or into web analytics. However my efforts are always shunned by replies that boil down to "We need experience". In fact there was this one time when I actually asked a senior executive, "Sir, you say you require experience, but so do I. Why are you not willing to give me a chance" to which he coldly replied "I can see where you coming from.. but this is not the place."

Please dont get me wrong, I am not here to ask for a job. All I want to know is how can I start learning and applying these things in order to empower myself enough. I have been reading about the web's raw potential, can you please show me a way how I can actually do it.. I mean hands on.

I really agree that many company have shoddy websites that dont even help viewing or placing orders. They have such terrible landing pages and the worst is improperly constructed content. I just want to know how can I empower myself and get on this ride and make a career in this arena. Please give me insights on certain dos and donts so.

I apologize if my comments and requests have been off track, but I am really looking out for some serious professional advice and help.

@Kevin, we do need to say "Test me, make me tell you about YOUR data" to our bosses. It is sooo easy to show data out of context…terrifyingly so, actually. I think that's why I double and triple check numbers sometimes :-)

Idea: I think a "HiPPO" analytics UI option would be sweet. Bosses could go in and look and gain understanding without complexity staring them down, making them doubt their instincts, and getting completely lost. Boil it down to the core pieces that they can't do without! Of course, that might eliminate some of our job!

Google's annotations have begun to help in this, as I can leave helpful tidbits for myself and others as we work our way through the data piles.

@Craig. Agreed. I actually get 20 official minutes a month to present data to the HIPPos in a formal setting. While we do meet willy and nigh on these topics throughout the month, we don't spend enough time ALL TOGETHER on it.

And that's as much my fault as it is theirs. We know the substantial portion of our business that is web driven. All of us do.

I'm afraid that I haven't done enough to help them understand that it's not rocket science. I mean, we can look at each web visit as being essentially a phone call to the owner of the company. "Hey. I need help." We all know that's what EVERY customer is saying when they are in our stores, on our website, or on our trunk lines. (Sorry VOIP people…)

At the same time, most large organizations set standards for lengths of customer service phone calls, or in line visits with a cashier or customer service representative in the store.

Is the web so magical that HIPPOs can't align the same kind of thinking to their websites?

Thanks for these interesting perspectives…Avinash ! Without being judgemental, I believe the status quo thinking and the inability to see change as the only way forward prevents these nuggets you present from becoming a reality. Having said that, things are changing as influencers are changing mindsets of people.

A great post and insight into what have been a fascinating evening. I would love to hear the comments made to both your face and sotto voce.

But as you say, these people are smart. Generally speaking I believe marketers are more emotionally equipped to handle real interaction with customers or website visitors. But somehow they fail to take action…

Their failing seems to me that of knowing but not doing. This topic is has been well researched by Pfeffer and Sutton in their helpfully-titled book "The Knowing-Doing Gap". In this book the authors list the main factors as

I do consult for a number of advertising agencies and marketing firms. I am still too often amazed how they don't understand how internet marketing works. Way too often actually.

They still believe that a Facebook public profile can be sold like a billboard or a twitter account like a sign in a store front. The paradigm shift to conversation and the transparency of the data you can get from analyzing a campaign online is just too much for them. So, they bury their heads in the sand and keep doing things the way the always have.

Many of them don't see any value in tracking the activity on their own website. Then they wonder why their clients don't see the value in online marketing, but really in the end they are doing a disservice to their clients. After all they were hired to find the best way to promote their company.

I've several of old school marketing firms collapse because their clients woke up and realized their marketing guys missed the revolution.

Trackbacks

[…]
I came across a very inspirational post by Avinash Kaushik today which got me thinking: Online Marketing Still A Faith Based Initiative. Why? What’s The Fix? I am quoting from his blog “… if you look around you on the web you’ll see that we swim in a sea of mediocrity. We still see irrelevant blinking banner ads. You’ll see astonishingly sucky websites, belonging to come of the best companies in the world. You’ll bump into advertising that is remarkable in how irrelevant it is to customer intent. You’ll see horrid landing pages. You’ll experience missing calls to action, rambling text, and water boarding through Adobe Flash. So in a channel that is so full of promise, so full of data, so empowering when it comes to relevance and creativity… why is it that we suck so much?”

True indeed! Why do we suck so much? Take the example of Email Marketing
[…]

[…]
For brands to be successful, they need the Internet to be in their blood. Period. End of story. Case closed.

…and there's more where that came from. Avinash published his comments as a Blog post today titled, Online Marketing Still A Faith Based Initiative. Why? What's The Fix? Read it now and pass it on to your entire team. It is an important read.
[…]

[…]
Online Marketing Still A Faith Based Initiative. Why? What's The Fix? – Avinash Kaushik, Occam's Razor What can I say? It's Avinash. Once again, Our Good Saint of The Measure does his level best to make sure we can not only appreciate the numbers, but back up our hard work with measurable data. Enough religion – let's filter online marketing through physics instead.
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[…]
1. Online Marketing Still A Faith Based Initiative. Why? What’s The Fix?

This post by Avinash from his widely read blog ‘Occam’s Razor‘ was a transcript of his presentation to an audience of CEO’s and highlights the faith based approach of using the traditional marketing mediums despite the fact that they are almost impossible to measure.
[…]

[…]
On his blog, Occam’s Razor by Avinash Kaushik, he posted a speech he gave to the Canadian Marketing Association where he discussed how marketing was traditionally measured offline and how it is being done online. This was good.

Then he broke it down when it comes to measuring online data. This was better.

Finally, he hit the nail on the head when it came to the conclusion as to why there is so much mediocrity online with ineffective results.
[…]

[…]
The big question is; How do you help them understand? And Avinash answered that by embarrassing the hell out of the executives he works with. Prove to them that they’re missing opportunities and that effective digital marketers are doing more with much much less and you’re sure to get their attention.

Here’s the link: Online Marketing Still A Faith Based Initiative. Why? What’s The Fix?
[…]

[…]
If you gain money through Google advertising, you know about it; with the old media, you're just guessing. Avinash Kaushik, a well-known internet business commentator, has called advertising via the old-media channels "faith-based marketing": you spend your budget on adverts, and then pray that they drive business to your door – but you have no way of knowing whether they actually do. But that is about to change, as new technologies blur the line between television and the internet.
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[…]
If Richard Dawkins was not such an eminent evolutionary biologist he may have considered a career as a web analyst as I am sure he would appreciate how the science of web analytics in digital media science has replaced superstition. The speed at which this transition from what has been termed ‘Faith-based marketing’ – see https://www.kaushik.net/avinash/online-marketing-faith-based-initiative-fix) – that is a reliance on traditional media measurement tools to assess campaign effectiveness.
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[…]
Avinash writes with zeal and humour and has made analytics cool. I have been trading off his “web in your blood” line for nearly two years. If you take a picture of his book he posts it in his Flickr account. If after listening to him talk about the web you are not inspired you must have concrete pulsing through your veins.
[…]

[…]
Having worked in web analytics for over seven years now, I’m well acquainted with the pursuit of data-driven business. The removal of intuition in decision making has long been a Shangri La for business owners, managers and marketers alike. As digital marketing began to explode at the beginning of the last decade, there were many who believed that faith-based marketing would disappear. In reality, most companies still have guesswork at the heart of managing huge budgets and important decisions.
[…]

[…]
Having worked in web analytics for over seven years now, I’m well acquainted with the pursuit of data-driven business. The removal of intuition in decision making has long been a Shangri La for business owners, managers and marketers alike. As digital marketing began to explode at the beginning of the last decade, there were many who believed that faith-based marketing would disappear. In reality, most companies still have guesswork at the heart of managing huge budgets and important decisions.
[…]

[…]
Is about as close to a business blog as I like to get. Avinash writes with zeal and humour and has made analytics cool. I have been trading off his “web in your blood” line for nearly two years. If you take a picture of his book he posts it in his Flickr account. If after listening to him talk about the web you are not inspired you must have concrete pulsing through your veins.
[…]

[…]
Unfortunately, the web analytics band wagon hasn’t really gained the kind of popularity it should have by now. My take on this is that businesses are generally unaware of the true potential and importance of web analytics. Agencies on the other hand have brushed analytics under the rug because that would put them in a position where they’d have to audit the true business impact of the services they are providing to their clients.
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